{"id":11190,"date":"2022-07-05T16:32:53","date_gmt":"2022-07-05T11:02:53","guid":{"rendered":"https:\/\/blogs.univest.in\/?p=11190"},"modified":"2022-10-13T12:57:53","modified_gmt":"2022-10-13T07:27:53","slug":"government-export-tax","status":"publish","type":"post","link":"https:\/\/univest.in\/blogs-2\/government-export-tax\/","title":{"rendered":"Government increased export taxes on petrol, diesel, and ATF"},"content":{"rendered":"<p class=\"reader-text-block__paragraph\">The government has decided to impose an export tax on petrol, diesel, and jet fuel (ATF) transported abroad by companies like Reliance Industries in order to relieve the shortage of local fuel supplies. Additionally, it has slapped a windfall tax on domestically produced crude oil generated by businesses like ONGC and Vedanta.<\/p>\n<p class=\"reader-text-block__paragraph\">Another government announcement revealed that an extra tax of Rs 23,230 per tonne had been imposed on locally produced crude oil to offset producers&#8217; windfall profits from high international oil prices. &#8220;The cost of crude has significantly increased recently. Domestic oil producers offer their product to domestic refineries at prices that are competitive internationally. Thus, domestic crude producers are benefiting unexpectedly. Acess of Rs 23,250 per tonne has been placed on oil in consideration of this. According to the administration, imports of oil would not be subject to this cess.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/univest.in\/blogs-2\/government-export-tax\/#Reasons_for_increasing_Export_Tax_on_fuel_by_Central_Gov\" title=\"Reasons for increasing Export Tax on fuel by Central Gov\">Reasons for increasing Export Tax on fuel by Central Gov<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/univest.in\/blogs-2\/government-export-tax\/#Market_reaction_on_increase_in_Excise_duty_on_Petrol_Diesel\" title=\"Market reaction on increase in Excise duty on Petrol &amp; Diesel\">Market reaction on increase in Excise duty on Petrol &amp; Diesel<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/univest.in\/blogs-2\/government-export-tax\/#Retail_Price_in_India_compared_to_Global_Prices\" title=\"Retail Price in India compared to Global Prices\">Retail Price in India compared to Global Prices<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/univest.in\/blogs-2\/government-export-tax\/#Implications_on_Stock_Market\" title=\"Implications on Stock Market\">Implications on Stock Market<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/univest.in\/blogs-2\/government-export-tax\/#Further_planning_on_Taxes_on_Fuel\" title=\"Further planning on Taxes on Fuel\">Further planning on Taxes on Fuel<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/univest.in\/blogs-2\/government-export-tax\/#About_the_Author\" title=\"About the Author\">About the Author<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3 class=\"reader-text-block__paragraph\"><span class=\"ez-toc-section\" id=\"Reasons_for_increasing_Export_Tax_on_fuel_by_Central_Gov\"><\/span>Reasons for increasing Export Tax on fuel by Central Gov<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p class=\"reader-text-block__paragraph\">Nirmala Sitharaman, the union finance minister, explained the tariffs, saying although they were pleased with the profits fuel exporting firms were generating, the tax measures were necessary because of the &#8220;exceptional circumstances&#8221; we are living in. &#8220;International oil prices are currently out of control. They simply keep moving higher.<\/p>\n<p class=\"reader-text-block__paragraph\">Additionally, we must spend that much money to import goods into any country, such as India, which depends heavily and significantly on imports. However, exports from India are taking place and at an unusual price, (producing) tremendous profits. We have nothing against individuals making money. However, at a time when we don&#8217;t have enough supplies in India for the exploration or refinement that is taking place there,&#8221; she said in a press conference. The Finance Ministry did not provide a date for the levy&#8217;s continuation, but it did state that it will reassess the situation every 15 days to determine how these duty modifications have affected things.<\/p>\n<p class=\"reader-text-block__paragraph\">Recently, the UK imposed a 25% tax on &#8220;exceptional&#8221; revenues from the production of oil and gas in the North Sea in order to collect $6.3 billion for its assistance programme. In order to reduce inflationary pressure, the Indian government reduced the excise charge on gasoline and diesel.The cost of this action to the government was Rs. 1 lakh crore.<\/p>\n<p class=\"reader-text-block__paragraph\">Following Russia&#8217;s invasion of Ukraine, oil refiners, in particular Reliance Industries and Rosneft-backed Nayara Energy, made a mint by shipping petroleum to impoverished areas like Europe and the US. They are said to have processed discounted Russian crude oil after the West spurned it and sold the fuel made from it to Europe and the US.<\/p>\n<h3 class=\"reader-text-block__paragraph\"><span class=\"ez-toc-section\" id=\"Market_reaction_on_increase_in_Excise_duty_on_Petrol_Diesel\"><\/span>Market reaction on increase in Excise duty on Petrol &amp; Diesel<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p class=\"reader-text-block__paragraph\">Although this action might lessen the fuel scarcity at petrol stations across the nation, it would have an adverse effect on these business&#8217; finances. After the statement, Reliance Industries Ltd.&#8217;s share price dropped by more than 7% on the BSE, ending the 1 July at Rs. 2408.95. Due to the increase in global petroleum prices, domestic crude producers are benefiting greatly. Following the release, ONGC Ltd.&#8217;s share price dropped 13.40% on the BSE. While Mangalore Refinery and Petrochemical fell 10%, Oil India fell more than 15%. The shares of Hindustan Oil Exploration Company sank more than 3%, while Chennai Petroleum Corporation plunged more than 5% on 1 July.<\/p>\n<h3 class=\"reader-text-block__paragraph\"><span class=\"ez-toc-section\" id=\"Retail_Price_in_India_compared_to_Global_Prices\"><\/span><strong>Retail Price in India compared to Global Prices<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p class=\"reader-text-block__paragraph\">India is increasingly reliant on imports to meet its needs for petroleum products. For instance, net petroleum product imports were 69 % of total consumption in 1998\u20131999 but grew to over 95 % in 2020\u201321. Any change in the price of crude oil globally has a substantial influence on the domestic cost of petroleum products since imports make up a large portion of domestic consumption. The two figures below indicate the trajectory of India&#8217;s retail pricing for gasoline and diesel during the past nine years, as well as the price of global crude oil.<\/p>\n<div class=\"reader-image-block reader-image-block--full-width\">\n<div class=\"ivm-image-view-model \">\n<div class=\"ivm-view-attr__img-wrapper ivm-view-attr__img-wrapper--use-img-tag display-flex \"><img decoding=\"async\" id=\"ember418\" class=\"ivm-view-attr__img--centered reader-image-block__img lazy-image ember-view\" src=\"https:\/\/media-exp2.licdn.com\/dms\/image\/D4D12AQHiZWXoXaO4Xg\/article-inline_image-shrink_1500_2232\/0\/1657017150192?e=1662595200&amp;v=beta&amp;t=551xWG49T-CGP5NjRtuUcxLTYtEf2_x4IFBYT8EaQ7c\" alt=\"No alt text provided for this image\" \/><\/div>\n<\/div>\n<\/div>\n<div class=\"reader-image-block reader-image-block--full-width\">\n<div class=\"ivm-image-view-model \">\n<div class=\"ivm-view-attr__img-wrapper ivm-view-attr__img-wrapper--use-img-tag display-flex \"><img decoding=\"async\" id=\"ember419\" class=\"ivm-view-attr__img--centered reader-image-block__img lazy-image ember-view\" src=\"https:\/\/media-exp2.licdn.com\/dms\/image\/D4D12AQGgjlJYNSj1Sg\/article-inline_image-shrink_1500_2232\/0\/1657017131325?e=1662595200&amp;v=beta&amp;t=2VYL8Y4WjQN60KVuxEEvpynupDj1RkBxgfjP-X8xCbY\" alt=\"No alt text provided for this image\" \/><\/div>\n<\/div>\n<\/div>\n<h3 class=\"reader-text-block__paragraph\"><span class=\"ez-toc-section\" id=\"Implications_on_Stock_Market\"><\/span><strong>Implications on Stock Market<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p class=\"reader-text-block__paragraph\">Individual firms are most obviously impacted, even though stock markets may not be as a collective. There are several causes:<\/p>\n<p class=\"reader-text-block__paragraph\"><strong>Cost of Inputs Rising:<\/strong>\u00a0Oil is a crucial input for many businesses. Naturally, input costs and overall production costs increase along with rising crude oil prices. As a result, the profit margins decline, which in turn lowers the company&#8217;s stock price. Businesses like airlines, refineries, logistics, paints, and others are most negatively impacted.<\/p>\n<p class=\"reader-text-block__paragraph\"><strong>Current Account Deficit:<\/strong>\u00a0A significant share of India&#8217;s overall imports are made up of oil. Foreign currency begins to leave the country once the current account imbalance widens. The rupee weakens as a result of this. As a result, imports are now more expensive since the government will have to spend more money to obtain the same amount as before. Import costs rise, input costs rise, and stock prices decline once more.<\/p>\n<p class=\"reader-text-block__paragraph\"><strong>Increase in Transportation Costs:<\/strong>\u00a0As the price of crude oil rises, transportation costs will also go up, raising the company&#8217;s expenses. Once more, this suggests that profit margins will be less and stock prices will drop. In contrast, a decline in oil prices will result in a rise in stock prices.<\/p>\n<p class=\"reader-text-block__paragraph\"><strong>Rise in Inflation:<\/strong>\u00a0Investors lose faith in companies when inflation rises, which has a negative impact on stock values. On the other hand, a decline in oil prices increases investor confidence and benefits stock prices.<\/p>\n<h3 class=\"reader-text-block__paragraph\"><span class=\"ez-toc-section\" id=\"Further_planning_on_Taxes_on_Fuel\"><\/span>Further planning on Taxes on Fuel<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p class=\"reader-text-block__paragraph\">For the fiscal year ending March 31, 2023, the government drafted new regulations mandating oil businesses exporting gasoline to sell in the domestic market the equivalent of 50% of the volume supplied to clients abroad. This criterion has been set at 30% of the amount shipped for diesel.<\/p>\n<p class=\"reader-text-block__paragraph\">These <a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/explained-govt-can-garner-rs-1-trillion-from-duties\/cess-on-petroleum-products\/articleshow\/92643953.cms\" rel=\"nofollow noopener\" target=\"_blank\">export<\/a> limitations also serve to replenish domestic gasoline supplies at gas stations, some of which had run out in states like Gujarat, Madhya Pradesh, and Rajasthan as private refiners preferred to sell fuel abroad rather than domestically.<\/p>\n<p class=\"reader-text-block__paragraph\">Exports were favoured since retail prices for petrol and diesel at major PSU merchants were limited at levels well below their actual costs. As a result, private merchants, who hold less than 10% of the market, are forced to sell fuel at a loss or risk losing market share if they offer it at a higher price. Domestic producers that sell oil to local refineries at international parity rates have profited from the recent strong surge in crude prices.<\/p>\n<p class=\"reader-text-block__paragraph\">Additionally, a cess of Rs 6 per litre has been levied on aviation turbine fuel (ATF). However, according to the government, there won&#8217;t be any price increases in the domestic market as a result of these actions.<\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"About_the_Author\"><\/span>About the Author<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Ketan Sonalkar (SEBI Rgn No INA000011255)<\/p>\n<p>Ketan Sonalkar is a certified SEBI registered investment advisor and head of research at <a href=\"https:\/\/univest.in\/\">Univest<\/a>. He is one of the finest financial trainers, with a track record of having trained more than 2000 people in offline and online models. He serves as a consultant advisor to leading fintech and financial data firms. He has over 15 years of working experience in the finance field. He runs Advisory Services for Direct Equities and Personal Finance Transformation.<\/p>\n<p><em>Note \u2013 This channel is for educational and training purpose only &amp; any stock mentioned here should not be taken as a tip\/recommendation\/advice<\/em><\/p>\n<p><em>You may also like: <strong><a href=\"https:\/\/univest.in\/the-automobile-sector-is-back-to-88-of-pre-covid-levels\/\">Automobile sector shares<\/a><\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The government has decided to impose an export tax on petrol, diesel, and jet fuel (ATF) transported abroad by companies like Reliance Industries in order to relieve the shortage of local fuel supplies. Additionally, it has slapped a windfall tax on domestically produced crude oil generated by businesses like ONGC and Vedanta. Another government announcement<\/p>\n","protected":false},"author":6,"featured_media":26915,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[102,104,105,103,106,107],"class_list":["post-11190","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market","tag-central-government-tax-on-petrol","tag-excise-duty-on-petrol-2021","tag-petrol-diesel-tax","tag-petrol-diesel-tax-central-and-state","tag-petrol-state-tax-and-central-tax","tag-petrol-taxes-state-and-central"],"metadata":{"_schema_ref":["11166"],"_edit_lock":["1665650535:8"],"_edit_last":["8"],"_thumbnail_id":["26915"],"_nectar_gallery_slider":["off"],"_nectar_quote_author":[""],"_nectar_quote":[""],"_nectar_link":[""],"_nectar_video_m4v":[""],"_nectar_video_ogv":[""],"_nectar_video_poster":[""],"_nectar_video_embed":[""],"_nectar_audio_mp3":[""],"_nectar_audio_ogg":[""],"_post_item_masonry_sizing":["regular"],"_nectar_header_bg":[""],"_nectar_header_parallax":["off"],"_nectar_header_bg_height":[""],"_nectar_page_header_bg_alignment":["top"],"_nectar_header_bg_color":[""],"_nectar_header_font_color":[""],"_wpb_vc_js_status":["false"],"_yoast_wpseo_focuskw":["Increasing export taxes"],"_yoast_wpseo_title":["Increasing export taxes on petrol, diesel, and ATF"],"_yoast_wpseo_metadesc":["Government has decided to impose an export tax on petrol, diesel, and jet fuel (ATF) transported abroad by companies like Reliance Industries"],"_yoast_wpseo_linkdex":["65"],"_yoast_wpseo_content_score":["30"],"_yoast_wpseo_estimated-reading-time-minutes":["6"],"_yoast_wpseo_primary_category":["24"],"nectar_blog_post_view_count":["291"],"_schema_json":["a:13:{s:8:\"@context\";s:19:\"https:\/\/schema.org\/\";s:5:\"@type\";s:11:\"BlogPosting\";s:16:\"mainEntityOfPage\";a:2:{s:5:\"@type\";s:7:\"WebPage\";s:3:\"@id\";s:41:\"https:\/\/univest.in\/government-export-tax\/\";}s:3:\"url\";s:41:\"https:\/\/univest.in\/government-export-tax\/\";s:8:\"headline\";s:60:\"Government increased export taxes on petrol, diesel, and ATF\";s:13:\"datePublished\";s:25:\"2022-07-05T16:32:53+05:30\";s:12:\"dateModified\";s:25:\"2022-07-05T16:33:56+05:30\";s:9:\"publisher\";a:4:{s:5:\"@type\";s:12:\"Organization\";s:3:\"@id\";s:32:\"https:\/\/univest.in\/#organization\";s:4:\"name\";s:7:\"Univest\";s:4:\"logo\";a:4:{s:5:\"@type\";s:11:\"ImageObject\";s:3:\"url\";s:62:\"https:\/\/univest.in\/wp-content\/uploads\/2022\/06\/Univest-Logo.png\";s:5:\"width\";i:600;s:6:\"height\";i:60;}}s:5:\"image\";a:4:{s:5:\"@type\";s:11:\"ImageObject\";s:3:\"url\";s:68:\"https:\/\/univest.in\/wp-content\/uploads\/2022\/07\/Untitled-design-17.jpg\";s:5:\"width\";i:1280;s:6:\"height\";i:720;}s:14:\"articleSection\";s:6:\"Market\";s:8:\"keywords\";s:182:\"central government tax on petrol, excise duty on petrol 2021, petrol diesel tax, petrol diesel tax central and state, petrol state tax and central tax, petrol taxes state and central\";s:11:\"description\";s:310:\"The government has decided to impose an export tax on petrol, diesel, and jet fuel (ATF) transported abroad by companies like Reliance Industries in order to relieve the shortage of local fuel supplies. Additionally, it has slapped a windfall tax on domestically produced crude oil generated by businesses like\";s:6:\"author\";a:4:{s:5:\"@type\";s:6:\"Person\";s:4:\"name\";s:14:\"Avneet Dhamija\";s:3:\"url\";s:33:\"https:\/\/univest.in\/author\/avneet\/\";s:5:\"image\";a:4:{s:5:\"@type\";s:11:\"ImageObject\";s:3:\"url\";s:81:\"https:\/\/secure.gravatar.com\/avatar\/4b244dec68772ad327eead8f5575ec8f?s=96&d=mm&r=g\";s:6:\"height\";i:96;s:5:\"width\";i:96;}}}"],"_schema_json_timestamp":["1661799052"],"_yoast_wpseo_wordproof_timestamp":[""],"rank_math_primary_category":["24"],"rank_math_title":["Increasing export taxes on petrol, diesel, and ATF"],"rank_math_description":["Government has decided to impose an export tax on petrol, diesel, and jet fuel (ATF) transported abroad by companies like Reliance Industries"],"rank_math_focus_keyword":["Increasing export taxes"],"rank_math_news_sitemap_robots":["index"],"rank_math_robots":["a:1:{i:0;s:5:\"index\";}"],"rank_math_analytic_object_id":["294"],"post_views_count":["715"],"rank_math_internal_links_processed":["1"]},"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/univest-blog.storage.googleapis.com\/blogs\/wp-content\/uploads\/2024\/10\/18181935\/portfolio-4-2.jpg","_links":{"self":[{"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/posts\/11190","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/comments?post=11190"}],"version-history":[{"count":4,"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/posts\/11190\/revisions"}],"predecessor-version":[{"id":12295,"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/posts\/11190\/revisions\/12295"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/media\/26915"}],"wp:attachment":[{"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/media?parent=11190"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/categories?post=11190"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/tags?post=11190"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}